Being Smart
aka life
Down Payment
Closing Cost
Mortgage Loan
Buy Vs. Rent aka The Advantages and Disadvatages of Buying and Renting
Renting
Buying
Advantages
Disadvantages
More fixed costs for the
term of the lease
Variable costs
Not gaining equity,
but not losing it either
Equity may go up, down, or stay stagnant
When the lease is up,
you can just move
If you want to move, home generally must be sold
There is generally less work in maintaining a home or apartment
Work needs to be done by you--or paid for by you
Smaller amount of "up-front" cash
Generally a larger initial investment--the downpayment
Disadvantages
Advantages
No matter what happens with the value of the home, you will never gain equity
Over time, the mortgage balance decreases and equity builds, even if the value of the home does not increase
Limited--or no--ability to personalize
your living quarters
The ability to remodel and redecorate the home to match your needs and desires
No tax advantage to renting. Your landlord gets any and all tax breaks that are available
There can be tax advantages attached to home ownership. Consult competent legal and/or accounting advice for details for your situation